Prime Minister Portia Simpson Miller launched the $1 billion loan fund targeted at small and micro enterprises on Thursday. - File

The billion-dollar loan scheme, created by by Prime Minister Portia Simpson Miller from a drawdown on the National Insurance Fund (NIF), will offer loans of up to $5 million to debtors who, once acquiring the funds, will pay no more than 10 per cent interest.

The fund targets small operators.

According to a ministry paper titled 'NIF credit facility for small and medium enterprises' presented at the official launch of the scheme at the Knutsford Court Hotel in Kingston Thursday, the funds will be disbursed through participating financial institutions which will be charged with the responsibility of managing the loans.

Theses institutions will borrow the funds at four per cent interest but will be required to cap the rate charged to customers at the maximum retail rate of 10 per cent on the reducing balance.

Borrowers will be afforded a maximum of six months moratorium on principal and interest payments as part of the repayment terms, which is capped at 48 months.

The micro- small- and medium-enterprise sector, which employs well over 50 per cent of the work force, is the intended target market of the scheme, but will place particular focus on "enterprises involved in value-added activities."

"These would include but are not limited to light manufacturing; provision of business services; agro-processing; and production of craft items," said the ministry paper.

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